Fed balance-sheet runoff could rock fiscal boat 20 Sep 2017 The U.S. central bank will start shrinking its $4.5 trln bond portfolio next month. The timing is risky, with lawmakers set to spar over government funding and the debt ceiling. Fed downsizing will also cut the $92 bln it sent to Treasury last year, adding to budget pressures.
Russian bank aid plea tests too-big-to-fail triage 20 Sep 2017 B&N Bank, the country’s 12th-largest lender by assets, has asked for help less than a month after the central bank rescued rival Otkritie. Support would blur the line between systemically important banks and others. But rejecting the request could cause problems to spread.
Snap poll in Japan would be mixed for investors 20 Sep 2017 A renewed mandate for Premier Shinzo Abe would provide political certainty. It could also bring a big tax hike, which would hurt growth and the battle against deflation. In turn, that calls for yet more super-easy monetary policy: a plus for markets, at least in the short-term.
China “Belt and Road” waves red flag for investors 18 Sep 2017 Beijing’s vision of infrastructure connecting some 70 countries already has fund firms rushing to create vehicles to lure investment. But broad index ETFs miss that many projects make little commercial sense. Skeptical punters should focus on a narrower set of potential winners.
EU aims torpedo at asset managers’ Brexit defence 19 Sep 2017 Europe’s market regulator may be given new powers to prevent national watchdogs from turning a blind eye to funds that outsource jobs to the UK in the hope of luring business to their shores. London-based funds could face more upheaval than expected after Britain leaves the EU.
What we’ve learned about Brexit so far 19 Sep 2017 Britain’s divorce from the European Union is reaching the critical stage where talks are meant to shift from principle to detail. Progress is being slowed by bickering, technicalities and economic fog. Despite the risk of Brexit fatigue, five clear lessons stand out.
Activist has fighting chance with China’s Sina 19 Sep 2017 U.S. hedge fund Aristeia is going after the $8 bln Chinese web company. Sina looks like a good target: it is clearly undervalued and its boss is not protected by super-voting shares. A big stake in microblogging affiliate Weibo offers some straightforward ways to create value.
U.S. electricity grid is a Category 5 problem 18 Sep 2017 Hurricane Irma left much of Florida without power after ripping down transmission lines. Burying cables is one fix, if time-consuming. But storms are just one catastrophe threatening the nation’s aging electricity infrastructure. Upgrading it could cost as much as $2 trillion.
Qatar jet deal a win for BAE but a loss for London 18 Sep 2017 A deal to buy Typhoon fighter jets will secure thousands of UK manufacturing jobs. But building stronger defence ties with the sheikhdom is a risk when its squabble with Saudi Arabia is unresolved. That could backfire if the kingdom reacts by vetoing a London listing for Aramco.
Breakdown: Colour-coding Germany’s election 18 Sep 2017 GroKo, black-green or Jamaica? Angela Merkel is almost certain to win a fourth term, but the race to be her partner is wide open. The outcome matters for Germany – and for Europe. Breakingviews decodes the colourful jargon, and looks at the consequences of different outcomes.
Review: Dalio writes ultimate baby boomer’s guide 15 Sep 2017 The Bridgewater founder is true to his generation. He wants you to decide what you want and help you get it. To that end he offers his life and work principles – all 525 of them. It's a bid for immortality, like the algorithm he's designing to run his $160 bln hedge fund.
Asia bulls gather to enjoy a justified gloat 15 Sep 2017 Record numbers assembled at CLSA's investor forum in Hong Kong, where the Chinese-backed brokerage made the case for Asia. Soaring markets make the region an easy sell; even guest Steve Bannon sounded impressed. The risks are that China stumbles, or America gets its act together.
Review: India’s rock star governor reclaims stage 15 Sep 2017 Raghuram Rajan was silent on India for a year after leaving the central bank. Now he calls for a rescue of bad lenders, and criticises its banknote ban. His truncated reflections in “I Do What I Do” leave the reader wanting more, but are awkward for his lower-key successor.
U.S. healthcare for all inches toward mainstream 13 Sep 2017 Though the idea has kicked around for years, Bernie Sanders has been shouting into the Washington wind. Democrats will now give his universal-coverage pitch fresh momentum. It's a pricey plan, but one that warrants fresh consideration given rising costs and Obamacare strife.
Merkel’s past omissions will return to haunt her 12 Sep 2017 Germany’s Chancellor has for 12 years failed to invest enough, prepare for costly climate change goals, or tailor the welfare state to an ageing population. An economic upswing is hiding fault lines but Merkel’s past inactivity will exact a high price in the next downturn.
Thai baht races ahead of economic upgrades 12 Sep 2017 The Thai currency is near 28-month highs, buoyed by a growing current-account surplus, a weak dollar and attractive yields. But Thailand’s military rulers are doing little to improve the real economy. Asia’s best-performing currency could fall foul of economic gravity.
Dixon: No escape from debtors’ prison for Greece 11 Sep 2017 Alexis Tsipras is desperate to avoid surveillance of his actions by the country’s creditors when its third bailout ends next August. The best the Greek prime minister can hope for is to move from a high-security unit to an open prison – and only if he behaves.
Goldman’s biggest asset in UK banking is lateness 11 Sep 2017 The investment bank will start taking British deposits under the Marcus brand next summer. A startup with Wall Street infrastructure is an appealing mix. Sure, it’s a sign Goldman’s main business is looking limp – but baggage-laden UK lenders should not be too dismissive.
Italy’s latest bank bailout is gentle on taxpayers 11 Sep 2017 The country’s deposit fund is forking out 640 mln euros to clean up three small banks before they are sold to Credit Agricole. Prepping a target for a foreign rival looks generous and the fund’s returns are uncertain. At least taxpayers will be spared a hit this time.
Beijing prepares to stand yuan policy on head 11 Sep 2017 Having spent years fighting off capital outflows, China is getting worried about inflows into a runaway yuan. Excessive currency strength could hurt exports and complicate deleveraging. Capping the rally without confusing the market will be quite a trick.